Tips on Choosing Annuity Insurance and Effective Saving
When it comes to retirement, many people think of annuity insurance, a popular choice for those planning their finances to cover expenses in retirement. After years of hard work, most of us want a time to rest and enjoy our later years in peace and happiness. Planning for retirement by choosing annuity life insurance goes beyond preparing for life after work; it provides a safety net for both you and your family’s future security. For anyone wanting to learn more about this type of insurance, including what annuity insurance is and the different types available, this article will answer your questions and share tips for saving enough to support yourself during retirement.
1. What Is Annuity Insurance?
2. Types of Annuity Insurance
3. Tax Deduction Benefits with Annuity Insurance
4. Financial Planning Tips for Retirement
1. What Is Annuity Insurance?
Annuity insurance (also known as retirement insurance) is a type of life insurance focusing on savings. Insureds pay premiums over a set period, which may be 1 year, 5 years, or 10 years, according to the policy terms. Upon reaching the age of 55 (or 60, depending on the policy), they begin receiving annuity payments, continuing until age 85, 90, or 99.
If the insured passes away, the insurance company pays a lump sum to the designated beneficiary(ies), easing the financial burden on surviving loved ones.
Annuity insurance is ideal for those who want to secure a stable financial future. After working for years, everyone deserves to relax without financial concerns. Choosing retirement insurance provides a sense of security for that stage of life.
2. Types of Annuity Insurance
Currently, annuity life insurance is divided into two main types:
Annuity Insurance with Fixed Premium Payment Term
This type of annuity insurance locks in a fixed premium payment term, such as 1 year, 5 years, or 10 years. After paying for the set term, the policy continues to offer life coverage until the insured reaches retirement age. Then, the annuity payments begin at age 55 or 60 and continue until age 85 or 90.
Annuity Insurance with Fixed Final Premium Payment Year
This option of annuity insurance allows the insured to pay continuous premiums until reaching the age specified in the policy, such as 55 or 60 years old. Afterward, annuity payments begin and continue until the age of 85, 90, or 99, depending on the policy. This plan is suitable for those with a limited budget who prefer to save gradually over time rather than make a large initial payment.
3. Tax Deduction Benefits with Annuity Insurance
Insureds with annuity insurance can claim income tax deductions on annuity life insurance. They can claim an additional tax deduction beyond the regular 100,000 Baht up to 15% of assessable income, not exceeding 200,000 Baht.
When combined with contributions to provident funds, the Government Pension Fund, funds for private school teachers (if applicable), or investments in retirement mutual funds, insureds can claim up to 500,000 Baht in the same tax year.
4. Financial Planning Tips for Retirement
Retirement means the end of regular income from work, so careful financial planning ensures sufficient income to sustain your lifestyle. Starting to plan today not only helps reduce future concerns but also increases the chance to enjoy a financially independent and secure retirement. This article will provide financial planning strategies to help you prepare for retirement.
How to Calculate Retirement Savings?
Most people already have a rough idea of when they’d like to retire, but if you haven’t given it much thought, try estimating. Setting your retirement age helps you see how many years you have left to save up. Once you know the timeline, the next step is to calculate the amount you’ll need to save to reach your target.
This article offers a simple formula to estimate the amount you’ll need for retirement:
Required savings =
Annual post-retirement expenses* X Expected years in retirement
*Method to estimate annual post-retirement expenses = Approximately 70% of your current annual expenses.
Saving and Managing Income and Expenses Systematically
Once you know your target savings, the next step is to set up a systematic savings plan. Estimate the monthly or yearly amount to save and organize your income and expenses for smoother cash flow.
If you’re new to saving, start by allocating a portion of your regular income. Deduct essential expenses and save 10% of what’s left. Gradually build up your savings, and as your income grows, increase the savings amount accordingly. You can also look for side income opportunities to supplement your savings.
Investing in Funds
If you have some idle cash and want to grow it, investing in different funds is another good option. Today, many financial institutions offer various fund options for buying and selling investment units.
You could start with low-risk funds like government bonds, government debt securities funds, LTFs, or RFM mutual funds. Once you’re more familiar with investing, consider higher-risk options like equity funds, gold funds, commodity funds, or oil funds.
Keeping Up with Financial News and Economic Trends.
The current economy is unstable, with potential currency fluctuations and inflation affecting household spending. Regularly following financial news and investment market updates helps you adjust your financial plan to fit current economic conditions as much as possible.
Annuity Life Insurance
Annuity life insurance is a good savings option for those who feel they lack the discipline to save. Annuity insurance provides both savings and life coverage, making it an easy way to secure a retirement income. Think of it like placing money in a trusted friend’s care, who will return it when you need it most. When the time comes, your savings will be there, ready for you to use. This method creates financial security for the future and allows you to compare annuity insurance premiums to choose the best coverage for yourself.
Life after retirement can be uncertain, with health and financial challenges. However, planning now can reduce these risks. Annuity life insurance is an effective savings option, offering a secure foundation for your retirement. It ensures you’ll be able to enjoy your retirement confidently, providing long-term care for your family and securing your future.
A quality life means living happily and peacefully, both now and in the future. Planning to secure your life’s stability is essential. If you’re looking for tax-deductible annuity insurance or wondering which annuity insurance to choose, consider the Flexi Retire 90/5 from Muang Thai Life Assurance.
Benefit 1: Receive an annuity of up to 24%* annually (choose to start receiving annuity from age 55).
Benefit 2: Maximize your tax deduction up to 300,000 Baht.
✔ Choose to receive your annuity monthly or annually.
✔ Receive an annual annuity of up to 24%* until age 90.
✔ Adjust the start age for annuity payments after paying premiums for 5 years.
🔥Buy Now! Enjoy 0% interest on premium installments, available only for new annual policies and eligible credit cards
For more information:
☑️ Call Tel. 1766, available 24/7
☑️ Contact a life insurance agent, KASIKORNBANK or Land and Houses Bank branches nationwide.
* Benefits are based on a percentage of the sum insured amount on the policy effective date.
- Underwriting is subject to the Company’s rules.
Conditions are as specified by Muang Thai Life Assurance PCL and the banks. - Premium is eligible for tax deduction. Conditions are as specified by the Revenue Department.
- For tax deductions with annuity insurance, the maximum deduction is 300,000 Baht. Ordinary life insurance premiums should be exercised first for tax deductions. If ordinary life insurance premiums are not yet at the maximum of 100,000 Baht, use annuity premiums to reach this amount. The remaining annuity premiums may then be applied for a tax deduction of up to 15% of annual income, not exceeding 200,000 Baht.
- Please study details of coverage, conditions, and exclusions before making a decision to purchase insurance.
Sources: Retrieved on 10/10/67
🔖กรมสรรพากร
🔖ธนาคารแห่งประเทศไทย
🔖ธนาคารกสิกรไทย
🔖ธนาคารกรุงไทย
🔖ธนาคารไทยพาณิชย์